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2 BREACH LEVEL INDEX THE NUMBERS RECORDS BREACHED IN ,023,108,267 NUMBER OF BREACH INCIDENTS 1,541 BREACHED RECORDS INCREASE FROM LAST YEAR 78% RISK ASSESSMENT SCORES 7.0 AND HIGHER - A SEVERE BREACH, POSSIBLY EVEN CATASTROPHIC 106 More and more organizations are accepting the fact that despite their best efforts security breaches are unavoidable. DATA RECORDS WERE LOST OR STOLEN WITH THE FOLLOWING FREQUENCY EVERY DAY 2,803,036 EVERY HOUR 116,793 EVERY MINUTE 1,947 EVERY SECOND 32

3 INTRODUCTION 2014 YEAR IN REVIEW Many information security experts will remember 2014 as the year of the big breaches and with good reason. In addition to several high-profile hack attacks, the year included a number of lesser-known incidents that nevertheless resulted in significant theft of records, according to a comprehensive analysis of security breaches, conducted by Gemalto through data collected in its Breach Level Index. To produce this report, Gemalto, a leading global provider of digital security solutions, has gathered extensive publicly-available information about data breaches throughout the world. This data is aggregated in the Breach Level Index, a database the company maintains on data breaches globally. The information is analyzed in terms of the number of breaches, the number of data records lost, and data breaches by industry, type of breach, source and by country or region. Clearly, the numbers were up in Data breaches totaled 1,540, up 46% from the 1,056 in Even more dramatic was the rise in data records involved in the breaches. That jumped 78%, from about 575 million in 2013 to more than one billion in From a time perspective, in 2014 some 2,803,036 data records were stolen or lost every day, 116,793 every hour, 1,947 every minute and 32 every second. So figure in about the time it took to read the previous sentence, about 400 data records would have been stolen or lost based on the 2014 data breach statistics. And despite the growing interest of encryption technology as a means to protect for information and privacy, only 58 of the data breach incidents in 2014, or less than 4% of the total, involved data that was encrypted in part or in full. But beyond the numbers was the social, economic and even political impact of the breaches. Some of the most high profile data breaches ever, including the ones against retailer Home Depot and entertainment company Sony Pictures Entertainment, occurred in And the year began with the Target breach of the previous year, another highprofile attack, still very much on the public s mind. Many of the breaches in 2014 involved the theft or compromise of identifiable information, such as names, addresses and social security numbers. In comparison, many of the thefts of 2013 involved financial information such as credit card numbers. Following are some of the most notable examples of data breaches in 2014, including the number of records stolen, type of breach and risk assessment score. The score is calculated based on factors such as total number of records breached, the type of data in the records, the source of the breach and how the information was used. A score of 1 to 2.9 is minimal risk, 3 to 4.9 is moderate, 5 to 6.9 is critical, 7 to 8.9 is severe and 9 to 10 is catastrophic. The point of the scoring system in the Breach Level Index is to demonstrate that not all breaches have the same impact on organizations and amount of risk. 3

4 BREACH LEVEL INDEX NOTABLE DATA BREACHES 4 Home Depot ,000,000 records Korean Credit Bureau ,000,000 records JP Morgan Chase ,000,000 records AliExpress ,000,000 records Sony Pictures Entertainment ,000 records The breach against the U.S.-based home improvement specialty retailer was a financial access attack that involved 109 million records and scored a 10.0 on the risk assessment scale. It was one of the largest attacks of the year in terms of records compromised. According to a statement by the company, its payment data systems were attacked. The files containing the stolen addresses did not contain passwords, payment card information or other sensitive personal information, it said. The South Korean financial services provider suffered an identity theft breach that involved some 104 million records and scored a 10.0 on the risk assessment scale. CSO reported that the breach affected 27 million people, with compromised data coming from Web site registrations for various games and online gambling promotions, ringtone storefronts and movie ticketing. Records involved included names, account names and passwords, and resident registration numbers. The U.S.-based financial services provider suffered an identity theft breach that resulted in 83 million records being compromised, scoring a 10.0 on the risk assessment scale. In a post on its Web site, the company said based its forensic investigation there was no evidence that customer account numbers, passwords, user IDs, dates of birth or Social Security numbers were compromised during the attack. However, contact information such as name, address, phone number and address was compromised. A critical but easily exploitable personal information disclosure vulnerability was discovered in the popular online marketplace owned by Chinese e-commerce company Alibaba.com, which affected its millions of users worldwide, according to The Hacker News. The account access breach involved 300 million records and scored 9.5 on the risk assessment scale. The reported vulnerability could allow anyone to steal personal information about hundreds of millions of AliExpress users without knowing their account passwords. Although it scored relatively low in terms of the number of records involved (47,000), the identity theft attack against the U.S. entertainment company was one of the most highly publicized hack attacks ever, garnering much attention because the U.S. federal government blamed the incident on North Korean attackers. The SPE breach scored a 6.5 on the risk assessment scale. But this does not take into account the loss from intellectual property theft from any videos/movies that might have been illegally obtained and released.

6 BREACH LEVEL INDEX HOW THE INDUSTRIES COMPARE RETAIL FINANCIAL SERVICES 8 While the retail sector might not have ranked at the top of the industry list in terms of the number of breaches, it had an astounding number of records exposed and included some of the most high-profile attacks of the year. There were 176 data breaches among retailers, accounting for 11% of the total, which was up slightly from 8% in These attacks resulted in more than half a billion (567,316,824) data records being exposed. That amounted to 55% of all the records involved in data breaches during the year, compared with 29% in The average records lost per breach was 3,223,391, versus 6,600,000 in Among the top breaches in the There were a total of 179 data industry were AliExpress with 300,000,000 records; ebay, with 145,000,000 records; Home Depot, with 109,000,000 records; Hannaford Bros., with 4,200,000 records; Michael s Stores, with 3,000,000 records; Staples, with 1,160,000 records; and Domino s Pizza, with 650,000 records. As in the financial services industry, attacks against retailers put customers financial data at risk. It s clear from the types of attacks in the retail sector that many were financially motivated. These types of breaches tend to receive a lot of publicity, partly because of the number of records involved but also because many people can relate to conducting business with retailers electronically. breaches in the financial services industry, accounting for 12% of the total breaches last year. That percentage was down slightly from the year before, when it was 15%. Finance companies had 205,175,846 data records compromised, representing 20% of the total records and up from The average records lost per breach was 1,146,233 - up sharply from just 112,000 records in Among the top breaches in the finance sector were the Korean Credit Bureau, with 104,000,000 records; JP Morgan Chase, with 83,000,000 records; and HSBC Bank in Turkey, with 2,700,000 records.

7 DATA RECORDS STOLEN/ LOST BY INDUSTRY 2014 YEAR IN REVIEW 3% 3% 5% 5% 9% RETAIL FINANCIAL TECHNOLOGY 55% EDUCATION 20% GOVERNMENT OTHER HEALTHCARE TECHNOLOGY The technology industry, which includes social media sites, had 134 data breaches in That accounted for 9% of the total, down from 11% in The breaches against IT companies involved 96,493,092 data records, or 9% of the total. That percentage is down sharply from 2013, when it was 43%. Average records lost per breach in the industry was 720,097, compared with 5,700,000 in Top breaches in technology for the year included Naver, with an account access breach that exposed 25,000,000 records, and KT Corporation, with 12,000,000 records in identity theft. The breach numbers have to be somewhat good news for an industry that is always concerned about attacks aimed at stealing intellectual property or launched for competitive reasons. Perhaps companies focused on technology are more proactive when it comes to deploying security tools to help protect their networks and data. 9

8 BREACH LEVEL INDEX INDUSTRIES CONTINUED EDUCATION GOVERNMENT HEALTHCARE Educational institutions suffered Government agencies and other No industry experienced as many 157 data breaches in 2014, or public sector organizations data breaches as the healthcare 10% of the total breaches for all industries. These attacks resulted in 51,377,801 data records being experienced 264 data breaches, or 17% of the total, making it one of the most targeted industries. sector, which had 391 compromised, which accounted breaches in That amounted for 5% These attacks involved 50,121,314 data records, or 5% of the total for all industries. Average records to one quarter of all the breaches reported for the year. As high as that percentage is, it s actually of all the records stolen in attacks lost per breach was down from the 2013 share of 31%. last year. Among the top breach targets in 189,853 Healthcare organizations had 29,384,567 data records, or 3% of the industry were the Benesse The top breaches in government the total, compromised in these Holdings, with an identity theft included Northwestern city of attacks. That percentage is up attack involving 48.6 million Verden, with 18,000,000 records from 2% in The average records; Netherlands Primary exposed through a financial records lost per breach for the School, with an identity theft access attack; Serbian State, industry was 75,152, compared attack involving 1 million records; with 7,276,604 records through with 49,000 in and Maricopa County Community identity theft; and Internet country College District, with an identify Germany, with 16,000,000 records Among the top breaches in theft attack that exposed 309,079 through account access. healthcare were the Korean records. Medical Association, with While the average number of 17,000,000 records exposed in an As is clear from the statistics, records involved in each attacks identity theft attack; Community breaches against educational was relatively low compared Health Systems, with 4,500,000 institutions generally involve with financial services, for records in identity theft; and the 10 relatively small numbers of records. example, the total number of attacks was high. State of Texas Department of Health & Human Services, with 2,000,000 records in identity theft. continued on page 12

9 2014 DATA BREACHES THE WHO AND WHAT YEAR IN REVIEW Among the key characteristics of security breaches when it comes to addressing the attacks and making necessary changes to systems to avoid future attacks are the type of breach and the source. In many cases if organizations know how the attacks were conducted and by whom, they can take proactive steps to better protect themselves against similar intrusions and loss of data. The Breach Level Index shows there were a variety of types of attacks and sources in While the sources of the attacks remained largely unchanged from those in 2013, the types of attacks were quite different from year to year in terms of frequency. The most common type of source were malicious outsiders, who were involved in 854 breaches, or 55% of the total. The percentage is essentially unchanged from 57% in Clearly, this is by far the biggest threat organizations face today in terms of potential loss of data. The next type of source, responsible for about one quarter of the breaches, was accidental loss. This caused 380 of the data breaches. In 2013, accidental loss accounted for 27% of the breaches. It s a bit perplexing that so many breaches could be for 229 breaches. That was 15% of caused by accident, and shows the total, quite similar to the 13% that companies need to do a better in job of preventing mishaps that can lead to data loss. Next were state-sponsored attackers, who carried out 56 of Malicious insiders were the next the breaches, or 4%, in While most common source, responsible it s a small percentage of the total, NUMBER OF BREACH INCIDENTS BY SOURCE MALICIOUS OUTSIDER ACCIDENTAL LOSS MALICIOUS INSIDER STATE SPONSORED HACKTIVIST 4% 15% 55% 25% 11

10 BREACH LEVEL INDEX DATA BREACHES THE WHO AND WHAT these sources increased from less than 1% in This is likely to be a continuing trend, as countries launch hacks against each other for political, economic, retaliatory or other reasons. NUMBER OF BREACH INCIDENTS BY TYPE FINANCIAL ACCESS Hacktivists were the sources of ACCOUNT ACCESS just 19, or 1% of the attacks, with the percentage down from 2% the year before. NUISANCE EXISTENTIAL DATA 10% 8% The most common type of attack was identity theft. Organizations were hit with 827 of these attacks, which accounted for more than 11% 54% half of the total (54%). That s up dramatically from just 20% in 2013, which should be a concern 17% for security operations. Clearly they need to do more to prevent identity theft. The next most common type Other types of attacks were 12 of attack was financial access, accounting for 261 or 17% of the breaches. That was down substantially from 50% in So these first two types of attacks basically switched places from year to year, which shows how dynamic and unpredictable the security environment can be. account access (162 attacks or 11%, down from 28%); nuisance (157 attacks, or 10%, up from less than 1%); and existential data (134 attacks or 8%, up from 1%). The last two types represented fairly big increases and there deserve attention from security professionals. continued from page 10 Exposure of records in healthcare is not only a security concern for these organizations; it puts companies at risk for regulatory non-compliance. For example, organizations in the U.S. must comply with the Health Insurance Portability and Accountability Act (HIPAA), which calls for the secure handling of patient information.

11 2014 A NEW MINDSET FOR DATA SECURITY YEAR IN REVIEW Breach Prevention Alone Has Failed The 2014 Breach Level Index from Gemalto shows that data breaches are very much a growing threat for organizations. The number of records compromised is remarkable, considering the lengths many organizations go to in order to protect their data. It s apparent that a new approach to data security is needed if organizations are to stay ahead of the attackers and more effectively protect their intellectual property, data, customer information, employees, and their bottom lines against data breaches in the future. Security is consuming a larger share of total IT spending, but security effectiveness against the data-breach epidemic is not improving at all. Enterprises are not investing in security based on reality as it is; they re investing based on reality as it was: a bygone era where hackers were glory-seeking vandals, sensitive data was centralized, and the edge of the enterprise was a desktop PC in a known location. And in this reality, network firewalls and other network perimeter breach-prevention technologies were good enough. Unfortunately, yesterday s good enough approach to security is obsolete in an age where data is distributed across and beyond the enterprise, and hackers whether skilled criminals or insiders both malicious and accidental are a constant threat to data. There is nothing wrong with network perimeter security technologies they are an added layer of protection. The problem is that many enterprises today rely on them as the foundation of their information security strategies, and unfortunately there is really It s apparent that a new approach to data security is needed if organizations are to stay ahead of the attackers and more effectively protect against data breaches in the future. no fool-proof way to prevent a breach from occurring. Alarmingly, market trends show that the lion share of organizations have no plans of changing this approach. According to IDC, of the $32 billion enterprises spent on security technology in 2013, more than 26% ($8.4 billion) was invested in network perimeter security. 13

12 BREACH LEVEL INDEX A NEW MINDSET FOR DATA SECURITY From Breach Prevention to Breach Acceptance The Breach Level Index indicates that data breaches have been increasing in frequency and size over the last couple of years. So by definition, breach prevention is an irrelevant strategy for keeping out cybercriminals. In addition, every organization already has potential adversaries inside the perimeter. Disregarding these internal threats not only invites blatant misuse but also fails to protect against accidental carelessness. Even nonmalicious behaviors such as bringing work home via personal accounts, lost devices, storing data on USB drives and vendors unknowingly sharing network log-in credentials and passwords are a few examples of how easy it is to innocently leak sensitive data In today s environment, the core of any security strategy needs to shift from breach prevention to breach acceptance. And, when one approaches security from a breach-acceptance viewpoint, the world becomes a relatively simple place: securing data, not the perimeter, is the top priority. Securing the data is a challenging proposition in a world where cloud, virtualization and mobile devices are causing an exponential increase in the attack surface. Many organizations might be inclined to address this problem with a containment strategy - limiting the places where data can go, and only allowing a limited number of people to access it. However, this strategy of no where security is based on restricting data access and movement runs counter to everything technology enables today. The mandate today is to achieve a strategy of yes, which is built around the understanding that the movement and sharing of data is fundamental to business success. From Breach Acceptance to Securing the Breach It s one thing to change mindsets. It s another to implement a new approach to security across an organization. While there is no one size fits all prescription for achieving the Secure Breach reality, there are three steps that every company should take to mitigate the overall cost and adverse consequences that result from a security breach. Control access and authentication of users. Encrypt all sensitive data at rest and in motion, securely manage and store all of your encryption keys. By implementing each of these three steps into your IT infrastructure, companies can effectively prepare for a breach, and avoid falling victim to one. 14 It s not a question if your network will be breached, the only question is when. With the velocity of business increasing, new technologies constantly being deployed and new and sophisticated attacks regularly being launched, is it not inevitable that it is only a matter of time before your business is hacked. Learn more at: CONTROL USER ACCESS ENCRYPT THE DATA STORE AND MANAGE KEYS

13 The year 2014 will be a tipping point for data security and identity protection because data breaches became more prominent in the public consciousness.

14 What s Your Score? Find Out At BREACHLEVELINDEX.COM Information collected from public sources. Gemalto provides this information as-is, makes no representation or warranties regarding this information and is not liable for any use you make of it. Contact Us: For all office locations and contact information, visit and Gemalto NV. All rights reserved. Gemalto and SafeNet logos are registered trademarks. All other product names are trademarks of their respective owners

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